Trade Desk Thoughts - U.K. Current Account

U.K. Current Account Actual -11.0B, Expected -9.7B, Previous -5.5B (revised from -8.4B)

Release Explanation: This is a nation's total exports of Goods, Services, and Transfers, deducted from its total imports of them. (Not to be confused with the Trade Balance that looks solely at imported and exported Goods). Current Account Balance calculations exclude transactions in Financial assets and liabilities. It is a comprehensive accounting review of a nation's Global trade that includes the Trade Balance in its figures.

Trade Desk Thoughts: U.K. current account deficit reached £11.0 billion in the second quarter of 2008, up from a deficit of £5.5 billion in the first quarter (revised down from £8.4 billion). The second quarter current account represents 3.0% of the U.K. GDP. The large rise in the U.K. deficit was mainly due to a drop in direct investments (£17.3 billion in the first quarter to £14.4 billion in the second quarter) and a rise in deficit of other investment.

Forex Technical Reaction: The pound increased 50-pips at the time of the release. Early in the Asian session, the pound bounced off the 20-day moving average, and since then has gained 40 pips. Against the euro, the pound has gained 35 pips today.

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